Mary Jo Nicolas knew something was wrong with the $700 gas bill she got from NSP. But it took an investigation from the attorney general's office to get the utility to listen.

WHEN SHE FIRST got the bill, Mary Jo Nicolas says, she "just kinda laughed at it." She even took it to the office and showed it to her co-workers, who said it just had to be wrong. Next she called NSP, where a startled customer-service representative admitted that $700 was a bit high for a two-bedroom second-floor apartment. "What are you heating--the Mall of America?" Nicolas says he asked.

As it turned out, the bill represented the amount by which NSP said it had undercharged Nicholas and her husband during an eight-month period during which it never once read their gas meter. (NSP, which in Minneapolis sells only electricity, also supplies gas in St. Paul). NSP was estimating the Nicolas's gas bill at up to $300 a month, more than twice what the couple was actually using. And because they were only paying $55 a month on their budget plan--a plan NSP itself had set up for them--the artificially inflated bills soon piled up.

The Nicolases didn't know it at the time, but they were just one of tens of thousands of Minnesota households experiencing similar problems. Last week, the state attorney general's office reached a settlement with NSP under which the utility will pay some $6 million to more than 80,000 customers who were sent erroneous bills or none at all.

Diana Watters

When the settlement was announced, representatives for both NSP and the AG's office insisted that the utility was not admitting any wrongdoing. But that, claim advocates whose complaints helped initiate the AG's investigation, is a cop-out. "The company is trying to tell the tale that they didn't do anything wrong," says Greg Copeland of the low-income advocacy group Energy CENTS. "And yet by my calculation, just under 10 percent of their fourth-quarter profits are going to go into this settlement."

Jane Doyon, NSP's manager of Customer Business Operations, says the company can't comment on specific cases. In general, she says, erroneous bills have resulted from computer troubles and bad winter weather, which prevented its readers from reaching customers' meters.

But those factors don't explain what happened to the Nicolases. Their NSP bills say the company was unable to read their meter because there was "no answer [at] back door" each time they tried from October 1996 until May 1997. But Nicolas says her husband, who works mostly in the summer, was home most of that time, as was a downstairs tenant. She says her husband even saw the meter reader outside on occasion, but no one ever came and rang their bell. The "back door" the bills refer to, she says, must be the one leading to a root-cellar-like sub-basement behind their house.

Under the settlement announced last week, NSP will have to give households like the Nicolas's a $100 credit on their electricity bill. Customers will still have to pay for any energy they actually used, but the utility will have to give them more time to make the payments. "There were a lot of inconsistencies in terms of the payment schedules," says Scott Wilensky, who led the AG's negotiations with NSP. "We wanted something institutionalized."

Even so, some customers say the settlement won't make up for the trouble they experienced. Ginger Brown of St. Paul saw her NSP bill shoot up above $1,000 when her husband became seriously ill last year. Brown says the oxygen machine he needed to breathe might have caused additional energy use, but she doubts it was $1,000 worth because her husband wasn't home long before he died.

Either way, $1,000 was more than Brown could pay, so NSP shut off the power to her house twice last year. She says she had to borrow money both times to get her power back on. Brown says two of her children live with chronic asthma and need an oxygen machine during an attack. "I told [NSP] this, and they told me to take them to the hospital," she says. "I can't afford to pay [NSP's] bill--how am I supposed to pay a hospital bill?"

Energy CENTS's Copeland says Brown is a perfect example of the inferior service low-income customers have come to expect from NSP. "The credits customers will receive as a part of this settlement are important," he says. "But more important is the attention the attorney general will be paying to NSP's ongoing customer-service standards--especially for [low-income people] who are most adversely affected by NSP's practices but least able, individually, to hold NSP accountable."